MMDR ACT 1957

The Mines and Minerals (Development and Regulation) Act, 1957

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The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) provides a legal and regulatory framework for mining operations in India, including the granting of licences and leases, payment of royalties, and the development of minerals, ensuring that mining activities are conducted in a sustainable, transparent, and regulated manner.

Below is a structured summary of the key sections and provisions of the Act:

1. Preliminary (Chapter I)

  • Short Title and Commencement: The Act is known as the Mines and Minerals (Development and Regulation) Act, 1957, and it applies to the whole of India.
  • Union Control: The Act declares that it is expedient in the public interest for the Union to regulate mines and develop minerals.
  • Definitions: Provides definitions for terms like composite licence, mining lease, minerals, and others.

2. Restrictions on Prospecting and Mining Operations (Chapter II)

  • Section 4: Prospecting or mining operations can only be conducted under a valid licence or lease.
  • Section 4A: Details the termination of licences or leases for reasons like preservation of the environment, public safety, or regulation of mineral development.
  • Sections 5-8B: These sections cover restrictions on granting mineral concessions, maximum area, duration of prospecting licences and mining leases, and other conditions like transfer of statutory clearances and payment of royalties and dead rent.

3. Procedures for Obtaining Mineral Concessions (Chapter III)

  • Sections 10-11D: Outline the process for applying for mineral concessions, including rights of existing concession holders, auction-based grant of leases, and rules for specific minerals like coal or lignite.
  • Sections 10B and 11: Introduce the auction process for granting mining leases and composite licences.

4. Rules for Regulating the Grant of Mineral Concessions (Chapter IV)

  • Sections 13-15A: Grant the Central and State Governments power to make rules regarding the grant of licences and leases, particularly for minor minerals.

5. Special Powers of the Central Government (Chapter V)

  • Sections 17-17A: The Central Government has special powers to undertake prospecting or mining operations and reserve areas for conservation.

6. Development of Minerals (Chapter VI)

  • Section 18: Covers the overall development of minerals and the authority of the Geological Survey of India for investigations.

7. Miscellaneous Provisions (Chapter VII)

  • Sections 19-33: These include penalties for illegal mining, powers to search and seize, recovery of dues, delegation of powers, and constitution of Special Courts for adjudicating mining-related offenses

8. Miscellaneous Provisions (Chapter VIII)

  • First Schedule: Lists minerals that are subject to special regulatory oversight.
  • Second Schedule: Specifies the rates of royalty payable for different minerals.
  • Third Schedule: Specifies rates of dead rent.
  • Fourth Schedule: Lists notified minerals that require particular regulation.
  • Fifth and Sixth Schedules: Include provisions related to the additional payments by leaseholders and conditions for selling minerals.
  • Seventh Schedule: Specifies certain minerals for which exploration licences can be granted.

The attached schedules in the MMDR Act provide detailed guidance on the regulation of mineral concessions, royalty rates, payment of dead rent, conditions for mining leases, and exploration licences. They are designed to ensure the efficient and fair management of India’s mineral resources while providing necessary safeguards for strategic, economic, and environmental interests. Here is a summary of all the attached schedules:

1. First Schedule: Specified Minerals

  • Purpose: Lists minerals that are considered of strategic importance and require special regulatory oversight and approvals.
  • Minerals Included:
    • Part A: Hydrocarbon/Energy Minerals such as Coal and Lignite.
    • Part B: Atomic Minerals like Uranium, Thorium, and other minerals used for atomic energy.
    • Part C: Metallic and Non-Metallic Minerals of high economic value such as Iron Ore, Bauxite, Copper, Gold, Silver, Manganese Ore, Zinc, Lead, Limestone, Chromite, etc.
    • Part D: Other minerals not covered under Parts A, B, or C that are still significant for specific industrial and economic purposes.
  • Regulations: Mining leases for minerals in this schedule require prior approval from the Central Government, and specific rules are in place for auction and lease processes.

2. Second Schedule: Rates of Royalty

  • Purpose: Specifies the rates of royalty payable by the holders of mining leases for different minerals.
  • Details:
    • The rates are determined either as a fixed amount per tonne (e.g., for limestone, bauxite) or as a percentage of the average sale price of the mineral (e.g., for iron ore, manganese ore).
    • The royalty rates ensure that the State Governments receive fair compensation for the extraction of minerals.
  • Revisions: The Central Government has the authority to revise these rates, but the enhancement of rates cannot occur more than once every three years.

3. Third Schedule: Rates of Dead Rent

  • Purpose: Specifies the rates of dead rent payable by lessees.
  • Details:
    • Dead rent is the minimum payment that a mining leaseholder must pay annually, irrespective of whether they are extracting minerals or not.
    • The rates are based on the area covered by the lease and differ depending on the mineral type.
  • Revisions: The Central Government may amend the rates for dead rent as necessary, but not more than once in three years.

4. Fourth Schedule: Notified Minerals

  • Purpose: Lists notified minerals that require specific regulations and approvals for mining.
  • Minerals Included:
    • Includes economically and strategically significant minerals like Bauxite, Iron Ore, Limestone, Manganese Ore, Chromite, Copper Ore, Gold, Lead, Silver, Zinc, and Precious Stones (e.g., Diamonds, Emeralds, Rubies).
  • Regulations: Mining of these minerals is regulated through an auction-based system, and the Central Government’s approval is required for mining leases.

5. Fifth Schedule: Additional Payments for Mining Leases

  • Purpose: Specifies the additional amounts payable by Government companies or corporations that hold mining leases.
  • Details:
    • Includes provisions for payment of extra amounts for leases not granted through auctions.
    • The Central Government can amend this schedule to update the payments required.

6. Sixth Schedule: Conditions for Sale of Minerals

  • Purpose: Provides conditions under which Government companies or corporations can sell minerals mined for captive use.
  • Details:
    • For example, companies may sell up to 50% of the total mineral production after meeting their captive needs, with certain payments specified.
    • The percentage allowed for sale and the additional payments can be adjusted by the Central Government.

7. Seventh Schedule: Minerals Eligible for Exploration Licences

  • Purpose: Lists minerals for which exploration licences can be granted.
  • Details:
    • The schedule includes conditions for granting exploration licences for reconnaissance or prospecting operations for specific minerals.
    • The Central Government has the authority to modify the entries in the schedule to include or exclude certain minerals.